[Federal Register Volume 62, Number 116 (Tuesday, June 17, 1997)]
[Notices]
[Pages 32848-32849]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-15771]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-38731; File No. SR-NYSE-97-08]


Self-Regulatory Organizations; Order Approving Proposed Rule 
Change by New York Stock Exchange, Inc. Consisting of an Information 
Memo Relating to Electronic Delivery of Information to Customers by 
Exchange Members and Member Organizations

June 10, 1997.
    On March 24, 1997,\1\ the New York Stock Exchange, Inc. (``NYSE'' 
or ``Exchange'') submitted to the Securities and Exchange Commission 
(``SEC'' or ``Commission''), pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act'') \2\ and Rule 19b-4 
thereunder,\3\ a proposed rule change setting forth the Exchange's 
policy regarding electronic delivery of information required under 
Exchange rules to be furnished to customers. A notice of the proposed 
rule change appeared in the Federal Register on May 7, 1997.\4\ The 
Commission received no comment letters addressing the proposed rule 
change.
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    \1\ On April 24, 1997, the NYSE amended the exhibit attached to 
the rule filing. See letter from James E. Buck, Senior Vice 
President and Secretary, NYSE, Inc., to Katherine A. England, 
Assistant Director, Division of Market Regulation, SEC, dated April 
24, 1997.
    \2\ 15 U.S.C. 78s(b)(1) (1988).
    \3\ 17 CFR 240.19b-4 (1995).
    \4\ Securities Exchange Act Release No. 38567 (May 1, 1997); 62 
FR 25009 (May 7, 1997).
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    The Exchange has filed with the Commission an Information Memo 
(``Memo'') setting forth the Exchange's policy regarding electronic 
delivery of information required under Exchange rules to be furnished 
to customers. Under this proposed Exchange policy, members and member 
organizations will be allowed to electronically transmit documents 
required to be furnished to customers under Exchange rules, provided 
that they adhere to the Commission's established requirements. The 
Commission, in Release Nos. 34-37182 \5\ and 33-7233,\6\ addresses the 
procedural aspects of how broker-dealers and others may satisfy their 
delivery obligations under federal securities laws by using electronic 
media as an alternative to paper-based media provided that they comply 
with certain prescribed requirements.
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    \5\ See, Securities Exchange Act Release No. 37182, May 9, 1996; 
61 FR 24644, May 15, 1996, (Commission's interpretation concerning 
the delivery of information through electronic media in satisfaction 
of broker-dealer and transfer agent requirements to deliver 
information under the Act and the rules thereunder).
    \6\ See, Securities Act Release No. 7233, Oct. 6, 1995; 60 FR 
53458, Oct. 13, 1995, (Commission's interpretation concerning the 
use of electronic media as a means of delivering information 
required to be disseminated pursuant to the Securities Act of 1933, 
the Securities Exchange Act of 1934, and the Investment Company Act 
of 1940).
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    The Memo summarizes the Commission procedures, which address 
format, content, access, evidence of receipt of delivery, and consent 
for delivery of personal financial information. The Memo also sets 
forth a list of current Exchange rules that require members and member 
organizations to furnish specific information to customers for which 
electronic delivery may be used in accordance with the Commission 
Releases.\7\ The Exchange intends that the policy outlined in this Memo 
cover all communications required to be sent to customers by firms 
pursuant to Exchange rules.
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    \7\ The Exchange believes this list is complete. The Commission 
notes, however, that if the Exchange proposes a rule for which 
electronic delivery of information to customers may be used, then 
the Exchange should specify that the rule would be governed by this 
interpretation, as well.
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    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
promulgated thereunder. Specifically, the

[[Page 32849]]

Commission believes that approval of the proposed rule change is 
consistent with Section 6(b)(5) \8\ of the Act. Pursuant to Section 
6(b)(5), the proposed rule change benefits the public,\9\ because it 
not only allows customers easy and efficient access to account 
documentation, but also requires an evaluation of systems and 
procedures to ensure that the privacy of personal information is 
maintained. In using the Commission's releases as a guide,\10\ the 
Exchange has established a uniform policy concerning electronic 
delivery of information which should allow members and member 
organizations to satisfy their delivery obligations under federal 
securities laws and the Exchange's rules. This uniform policy should 
simplify compliance by members and member organizations and aid the 
Exchange in monitoring the same.
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    \8\ Section 6(b)(5) requires the Commission to determine that a 
registered national securities exchange's rules are designed to 
prevent fraudulent acts and practices, to promote just and equitable 
principles of trade, and, in general, to protect investors and the 
public interest.
    \9\ Pursuant to Section 3(f) of the Act, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. 15 U.S.C. Sec. 78c(f) (1996).
    \10\ See supra notes 5 and 6.
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    For the above reasons, the Commission believes that the proposed 
rule change is consistent with the provisions of the Act, and in 
particular with Section 6(b)(5).
    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\11\ that the proposed rule change (SR-NYSE-97-08) be, and hereby 
is approved.

    \11\ 15 U.S.C. 78s(b)(2) (1988).
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    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-15771 Filed 6-16-97; 8:45 am]
BILLING CODE 8010-01-M